FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-15758
JACQUES-MILLER INCOME FUND, L.P. - II
(Exact name of small business issuer as specified in its charter)
Delaware 62-1244325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the Partnership was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 2000
Assets
Cash and cash equivalents $ 803
Notes receivable from affiliated parties (net of
allowance of approximately $2,332) --
$ 803
Liabilities and Partners' (Deficit) Capital
Liabilities
Other liabilities $ 11
Partners' (Deficit) Capital
General partner $ (106)
Limited partners (12,400 units issued and
outstanding) 898 792
$ 803
See Accompanying Notes to Consolidated Financial Statements
b)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2000 1999
Revenues:
Interest income $ 9 $ 7
Expenses:
General and administrative 17 10
Net loss $ (8) $ (3)
Net loss allocated to general partner (1%) $ -- $ --
Net loss allocated to limited partners (99%) (8) (3)
$ (8) $ (3)
Net loss per limited partnership unit $(0.65) $(0.24)
See Accompanying Notes to Consolidated Financial Statements
c)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Partners' (deficit) capital at
December 31, 1999 12,400 $ (106) $ 906 $ 800
Net loss for the three months
ended March 31, 2000 -- -- (8) (8)
Partners' (deficit) capital
at March 31, 2000 12,400 $ (106) $ 898 $ 792
See Accompanying Notes to Consolidated Financial Statements
d)
JACQUES-MILLER INCOME FUND, L.P. - II
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
Net loss $ (8) $ (3)
Adjustments to reconcile net loss to net cash
used in operating activities:
Change in accounts:
Other liabilities (14) (12)
Net cash used in operating activities (22) (15)
Net decrease in cash and cash equivalents (22) (15)
Cash and cash equivalents at beginning of period 825 774
Cash and cash equivalents at end of period $ 803 $ 759
See Accompanying Notes to Consolidated Financial Statements
e)
JACQUES-MILLER INCOME FUND, L.P. - II
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Jacques-Miller
Income Fund, L.P. - II ("Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Jacques-Miller, Inc. (the "Corporate
General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 2000, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Partnership's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1999.
Principles of Consolidation
The consolidated financial statements include all the accounts of the
Partnership and a 99% limited partnership interest in Jacques-Miller Income Fund
II Special Asset Partnership ("La Plaza") L.P. All significant interpartnership
balances have been eliminated.
Note B - Transfer of Control
On December 10, 1998, Apartment Investment and Management Company ("AIMCO")
entered into an agreement with the sole shareholder of the Corporate General
Partner pursuant to which AIMCO was granted the right to elect the directors of
the Corporate General Partner. In connection with this transaction, the then
current officer and director of the Corporate General Partner resigned and AIMCO
appointed a new director who, in turn, appointed new officers of the Corporate
General Partner. The Corporate General Partner does not believe that this
transaction has had or will have a material effect on the affairs and operations
of the Partnership.
Note C - Notes Receivable from Affiliated Parties
Notes receivable consist of the following (in thousands):
March 31,
2000
Notes receivable $ 937
Accrued interest receivable 1,395
2,332
Provision for uncollectible notes
receivable (including
approximately $1,202 of
deferred interest revenue) (2,332)
$ --
The Partnership holds three notes receivable at March 31, 2000, totaling
approximately $937,000 with approximately $1,395,000 of related accrued
interest, all of which is past due and fully reserved. Included in the provision
for uncollectible notes receivable is approximately $1,202,000 of deferred
interest revenue. Additionally, these three notes are due from related
partnerships. These three promissory notes bear interest at rates ranging from
12% to 12.5%, and are unsecured by the related partnerships and are subordinated
to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $383,000 (the "Catawba Club Note") matured November
1, 1997. A second note in the amount of approximately $454,000 with accrued
interest due in the amount of approximately $429,000 (the "Quail Run Note")
matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $583,000 (the "Highridge Note")
matured May 1, 1996. All of these notes were in default at March 31, 2000. The
Partnership is currently seeking to receive full payment on, and resolution of,
these notes. Payments on these notes are restricted to excess cash flow after
payments of the first and second mortgages of the affiliated partnerships and
are dependent on excess cash flow from the properties or sales proceeds. No
payments on these three notes were received in the period ended March 31, 2000
or 1999. These notes are fully reserved.
At the end of 1998, the Partnership agreed to accept approximately $70,000 in
full satisfaction of the Woodlawn Village Note. The outstanding balance of this
note receivable totaled approximately $501,000 including accrued interest, and
was fully reserved. The Partnership received this payment in April 1999.
Note D - Transactions with Affiliated Parties
Other than the notes receivable, as previously disclosed, the Partnership had
the following transactions:
On December 31, 1991, MAE GP Corporation ("MAE GP"), an affiliate of Insignia
Financial Group, acquired substantially all of the assets of Jacques-Miller,
Inc. (the general partner interest of the Registrant) including Jacques-Miller's
property management organization. However, the general partner interest of the
Registrant was not acquired during this transaction. As a result of a separate
Advisory Agreement between the Registrant and IFGP Corporation (an affiliate of
Insignia), Insignia and its affiliates succeeded to those asset management and
property management duties previously performed by Jacques-Miller.
An affiliate of the Corporate General Partner received reimbursements of
accountable administrative expenses amounting to approximately $2,000 and $3,000
for the three months ended March 31, 2000 and 1999, respectively.
AIMCO and its affiliates currently own 3,919 limited partnership units in the
Partnership representing 31.606% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
It is possible that AIMCO or its affiliates will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. When voting on
matters, AIMCO would in all likelihood vote the Units it acquired in a manner
favorable to the interest of the Corporate General Partner because of their
affiliation with the Corporate General Partner.
Note E - Segment Information
The Partnership has only one reportable segment. Moreover, due to the very
nature of the Partnership's operations, the Corporate General Partner believes
that segment-based disclosures will not result in a more meaningful presentation
than the consolidated financial statements as currently presented.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
Results of Operations
The Partnership's net loss for the three months ended March 31, 2000, was
approximately $8,000 compared to a net loss of approximately $3,000 for the
three months ended March 31, 1999. The increase in net loss for the three months
ended March 31, 2000, is attributable to an increase in total expenses partially
offset by an increase in total revenues. The increase in total expenses is
attributable to an increase in general and administrative expense which is
primarily due to an increase in professional fees relating to the administration
of the Partnership as compared to the same period in 1999. The increase in total
revenue is attributable to an increase in interest income as a result of higher
average cash balances held in interest bearing accounts. The Partnership
currently holds three notes from affiliated partnerships which require payments
from excess cash flow after payments of first and second mortgages of the
affiliated partnerships (see discussion below).
Liquidity and Capital Resources
At March 31, 2000, the Partnership held cash and cash equivalents of
approximately $803,000 as compared to approximately $759,000 at March 31, 1999.
The net decrease in cash and cash equivalents for the three months ended March
31, 2000, from the Partnership's year ended December 31, 1999, is approximately
$22,000 and is all due to net cash used in operating activities.
During 1998, the Partnership agreed to accept a payment of approximately $70,000
in full satisfaction of the note receivable from Woodlawn Village. The
outstanding balance of this note receivable totaled approximately $501,000,
including accrued interest, and was fully reserved. The Partnership received
this payment in April 1999.
The Partnership holds three notes receivable at March 31, 2000, totaling
approximately $937,000 with approximately $1,395,000 of related accrued
interest, all of which is fully reserved. Included in the provision for
uncollectible notes receivable is approximately $1,202,000 of deferred interest
revenue. Additionally, these three notes are due from related partnerships.
These three promissory notes are unsecured by the related partnerships and are
subordinated to the underlying mortgages of the respective partnerships.
One note in the amount of approximately $413,000 with accrued interest due in
the amount of approximately $383,000 (the "Catawba Club Note") matured November
1, 1997. A second note in the amount of approximately $454,000 with accrued
interest due in the amount of approximately $429,000 (the "Quail Run Note")
matured June 1, 1997. A third note in the amount of $70,000 with accrued
interest due in the amount of approximately $583,000 (the "Highridge Note")
matured May 1, 1996. All of these notes were in default at March 31, 2000. The
Partnership is currently seeking to receive full payment on, and resolution of,
these notes. Payments on these notes are restricted to excess cash flow after
payments of the first and second mortgages of the affiliated partnerships and
are dependent on excess cash flow from the properties or sales proceeds. No
payments on these three notes were received in the period ended March 31, 2000
or 1999. These notes are fully reserved.
No distributions were made during the three months ended March 31, 2000 and
1999. Future cash distributions will depend on the levels of net cash generated
from the collection of notes receivable and the availability of cash reserves.
The Partnership's distribution policy is reviewed on an annual basis. There can
be no assurance, however, that the Partnership will generate sufficient funds
from operations to permit distributions to its partners in 2000 or subsequent
periods.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended March 31, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JACQUES-MILLER INCOME FUND, L.P. - II
By: Jacques-Miller, Inc
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
President and Treasurer
Date: